AOL shopping itself to Yahoo, Microsoft
Posted
Jul 16 2008, 01:06 PM
by
Kim Peterson
Rating:
The back-and-forth competitive drama between Microsoft and Yahoo has opened a perfect opportunity for Time Warner to once again shop its AOL unit. Time Warner is reportedly looking at either merging AOL with Yahoo (with Time Warner getting a minority stake) or selling it outright to Microsoft. Time Warner shares have risen more than 2% today to $14.26 on the news, with Yahoo shares up nearly 4% to $22.38 and Microsoft shares up nearly 3% to $26.90.
Time Warner has wanted to offload AOL for a while, but now Microsoft and Yahoo are scrambling for Plan B's in the aftermath of failed buyout talks. AOL has a growing ad network and an aggressive new strategy, and could be a decent acquisition for either company. The question is, where should it end up?
AOL is strong in display advertising, and it's bulking up its family of Web properties with a number of new sites.
Yesterday brought the launch of a personal finance site called WalletPop and a photography site called Pixcetera. It's part of a new strategy to sell advertising: roll out lots of small, niche sites and let them grow or fail on their own.
Silicon Alley Insider argues that AOL is a better fit with Yahoo, since both companies' content sites and e-mail/IM systems complement each other. Yahoo's display advertising would get a boost as well. But Microsoft will offer more money, SAI says.
Kara Swisher suggests Microsoft could make good use of AOL's ad capabilities and Web properties.
paidContent says that Yahoo could appease angry shareholders with an AOL merger and show that the company can grow without Microsoft. On the other hand, Microsoft could use AOL to gain more traffic and become stronger in advertising.
Search Engine Land comes out of left field with this idea: Microsoft could buy AOL and then buy Yahoo's search business.
Disclosures: I don't own shares of any companies mentioned in this
post. And while Microsoft owns this blog, Microsoft does not control,
censor or otherwise have any editorial influence over what I write.